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Saturday, January 03, 2009

NYT Real Estate: "Someone Still Has Money"

We went out to dinner last night with some old-school UofC friends, and somehow the NYT came up. One of our friends mentioned that the Real Estate section is the first part of the Sunday paper she reads. I read it too, but usually later in the week..

One of their features is "Big Deal", on p2: it's usually 3 short item on big residential transactions--sort of NY real estate porn, for the 99% of the population that can't afford such real estate. The lead in tomorrow's Big Deal is truly a big (large) deal (a handful of the Sunday paper section actually get delivered on Saturday--the sections which aren't news-dependent), appropriately headline "Someone Still Has Money":

Despite faltering sales, it appears to be far too soon to declare the luxury market dead, especially now that we can raise a glass to what may be the most expensive condominium ever sold in the city, per square foot: a three-bedroom apartment on the 38th floor of 15 Central Park West, which changed hands for $27 million. The price works out to $9,480 per square foot, not counting the 22-foot-wide terrace facing Central Park.

Even so, that sale, filed with the New York City Department of Finance last week, reflects some of the new realities of the luxury market, now that the boom years are over. Deals are still being done, the records show, but often far below the asking price, and bankers and hedge-fund types, who once drove prices ever higher, are a fleeting presence.

It takes a detour into the type of non-hedge fund types who are still buying::

In deals that came together over the last month or so, the buyers included Bruce Nauman and his wife, Susan Rothenberg, who are both artists; an Italian fashion designer who sold his business just before the retail slowdown; some lawyers; and a wealthy writer who is a small-magazine publisher.

Or as David Javerbaum, the executive producer of “The Daily Show With Jon Stewart,” observed in an interview, “Having a comedy-writing job these days is steadier income than having a job on Wall Street.”

But the more interesting part is at the end, about the apartment in15 CPW--a building which was just built over the last couple years, in a rare instance of new construction overlooking Central Park (click on that link for an example of the views!). I happened to readan architecture review in the New Yorker(from Aug 2007) and have been noticing items about transactions in the building..the list of owners reads like a who's who of NY high finance; from the New Yorker review:

Among the buyers have been celebrities like Denzel Washington, Sting, Norman Lear, and Bob Costas, but, in truth, the more spectacular units went for prices that would make even a movie star blanch. The most expensive of all—a forty-five-million-dollar penthouse bought by the hedge-fund manager Daniel Loeb—was for a while the most expensive apartment ever sold in the city. A plurality of the buyers come from the world of finance, including Sanford Weill, the former head of Citibank, and Lloyd Blankfein, the C.E.O. of Goldman Sachs.

There was also a Market Movers blog post about that aspect of the building, titled "The Attraction of 15 CPW" (Market Movers is a great finance blog, btw.)

I'd walked by this building a few times--if you live in NYC, no doubt you have too: it's on CPW @ 61st/62nd, just north of Columbus Circle. (Click here) for a Google Map.) But it's not remarkable from the outside..but apparently quite fancy inside. (Google turned up

Back to today's NYT piece, which mentions Weill's apartment, and also the details of the recent sale:

The record-setting apartment on the 38th floor of 15 Central Park West at 62nd Street has 2,848 square feet, a lot by Manhattan standards (and a bit more than Mr. Javerbaum’s new apartment). But it lacks the spaciousness of some other apartments in the building.

It is small, for example, compared with the 6,744-square-foot penthouse bought in 2007 by Sanford I. Weill, the former chairman of Citigroup, for $42 million, or $6,287 a square foot.

Still, the apartment has 14-foot ceilings and huge windows with views on three sides. The master bedroom faces Central Park, the two other bedrooms face the Hudson River, and the living room looks south over the city.The seller was Richard T. Fields, a developer of casino resorts, who recently bought the Trump Marina hotel and casino in Atlantic City for $316 million.

Mr. Fields signed a contract to buy the apartment for $13.35 million in March 2006, while the building was under construction. But when he closed on it at the end of June 2008, he immediately put it on the market for $35 million.

Many people were amazed at the asking price. Mr. Fields was forced to reduce the price by 23 percent, but the property still set a record. The identity of the buyer was not disclosed in the city filing.

I'm not someone who's envious of the lifestyle of the very rich (and may or may not be famous..how many of have heard of Daniel Loeb, orAshok Varadhan, for that matter?). But I'm interested in real estate and architecture--esp in NYC, these days. And having been immersed in Wall St for a year or so, it's interested in see how that part of the city interacts with and affects other spheres of the city...and it will be interesting to see how all that changes, now that we've hit an inflection point (or rather, perhaps, a global maximum?) in the history of the city.

3 comments:

I can just agree...I am selling luxury condos in Toronto and despite the whole Canadian real estate market is slowing down (it's not collapse like in the USA, but still, prices are down by 2-10%) and the whole Canadian economy is losing steam, there is still good chance to make a very lucrative deal in the City. Some places are simply symbols and people buy it not because there is good living, but because they want to present it in their "portfolio", like latest Bentley, no matter if their shares lost $10 billion last year...Regards,Elli

Thanks for the comment, Elli. I was recently wondering how much of the real estate/credit/financial crisis had affected Canada. So good to get your 1sthand account.

Related to what you wrote, a friend commented as follows (on facebook, where my blog posts get imported):

"While stubbornly clinging to the belief that nothing about NYRE surprises, I continue to be routinely surprised. It'd be a fascinating experiment/social research topic to find out how people ascribe $10K/sf values to residential properties; the synergies of the underlying assumptions about NYC and the economy that allow such inflation. Don't know how familiar you are with CMBS but it really is a very interesting gauge/symptom of economic hubris."